China to boost propane imports notably on PDH projects in 2014

Jan 16, 2014 21:24 PM

GUANGZHOU (ICIS C1)--China is likely to increase propane imports notably in 2014, because more propane dehydrogenation units are scheduled for operation this year.
PDH units may push up the country’s propane imports by about 1.56m tonnes in 2014, versus a total of 4.01m tonnes of LPG imports in 2013, ICIS C1 data show.
Bohai Petrochemical in Tianjin, the first Chinese company with a PDH unit in operation, imported about 190,000 tonnes of propane in 2013. The company will require about 708,000 tonnes/year of propane if it runs the PDH unit at full capacity. The company may increase propane imports by around 518,000 tonnes of in 2014, mostly from the US.
Sanyuan Petrochemical and Satellite Petrochemical in east China plan to put their PDH units into operation in the second quarter of 2014. Each of the the two PDH units has a production capacity of 450,000 tonnes/year and will each require roughly 531,000 tonnes/year of propane if they run at full pelts. However, Sanyuan Petrochemical and Satellite Petrochemical will not run the two units at full capacity soon after startup and they may each import around 265,000 tonnes of propane in 2014.
The two companies’ propane imports will probably from the US too, because they have signed term contracts for US propane.
Haiyue New Material in Zhejiang province may import around 264,000 tonnes of propane in six cargoes in 2014. The company plans to begin operation at its 600,000 tonne/year PDH unit at the end of the second quarter or in the third quarter.
Yangzijiang Petrochemical is likely to trial its 600,000 tonne/year PDH unit in the third quarter and may import about 168,000 tonnes of propane this year, mostly from the US.
Yanhua Group in Shandong may import roughly 88,000 tonnes of propane, mostly from the Middle East. The company is scheduled to start up its 750,000 tonne/year PDH unit in late 2014 or early 2015.
Of the estimated propane imports, about 1.05m tonnes may be from the US and the remaining may be from the Middle East. As a result, the combined LPG imports from Asia Pacific (including the US) may account for much larger shares in 2014. China’s LPG imports from Asia Pacific may account for 26% of the country’s total, up from 6% in 2013. In contrast, the market share for LPG imports from the Middle East may drop to about 63%, down from 78% in the previous year.
Chinese companies with PDH units sign contracts with traders instead of with suppliers directly, and thus imports will be adjusted in accordance with traders’ supply, according to market sources.